Ninth Inning

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 1 of 48 Page ID #:1
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Michael D. Hausfeld
HAUSFELD LLP
1700 K Street NW, Suite 650
Washington, DC 20006
Tel: (202) 540-7200
Fax: (202)540-7201
Email: mhausfeld@hausfeld.com
Michael P. Lehmann (SBN 77152)

Bonny E. Sweeney (SBN 176174)
Christopher L. Lebsock (SBN 184546)
HAUSFELD LLP
600 Montgomery St., Suite 3200
San Francisco, CA 94111
Tel: (415) 633-1908
Fax: (415) 358-4980
Email: mlehmann@hausfeld.com
Email: bsweeney@hausfeld.com
Email: clebsock@hausfeld.com
Irving Scher
Scott A. Martin
HAUSFELD LLP
165 Broadway, Suite 2301
New York, NY 10006
Tel: (646) 357-1100
Fax: (212) 202-4322
Email: ischer@hausfeld.com
Email: smartin@hausfeld.com
Lee Albert
Brian Murray
GLANCY PONGRAY & MURRAY LLP
122 East 42nd Street, Suite 2920
New York, NY 10168
Tel: (212) 682-5340
Fax: (212) 884-0988
Email: lablert@glancylaw.com
Email: bmurray@glancylaw.com
Lionel Z. Glancy
GLANCY PONGRAY & MURRAY
LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Tel: (310) 201-9150
Fax: (310) 432-1495
Email: lglancy@glancylaw.com
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Attorneys for Plaintiff Ninth Inning Inc.

dba The Mucky Duck
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IN THE UNITED STATES DISTRICT COURT
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FOR THE CENTRAL DISTRICT OF CALIFORNIA
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Ninth Inning Inc. dba The Mucky

Duck, for itself and for all others
similarly situated,
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COMPLAINT
) Case No.
)
) CLASS ACTION
)
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vs.
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National Football League, Inc.
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th
345 Park Avenue, 7 Floor
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New York, NY 10154
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NFL Enterprises LLC
th
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345 Park Avenue, 7 Floor
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New York, NY 10154
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DirecTV, LLC
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2230 East Imperial Highway
El Segundo, California 90245-3504 )
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and
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DirecTV Holdings LLC
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2230 East Imperial Highway
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El Segundo, California 90245-3504,
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Defendants.
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________________________________ )
Plaintiff,
COMPLAINT FOR DAMAGES AND

DECLARATORY AND INJUNCTIVE
RELIEF PURSUANT TO SECTIONS 1
AND 2 OF THE SHERMAN ACT
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CLASS ACTION COMPLAINT FOR DAMAGES AND

DECLARATORY AND INJUNCTIVE RELIEF
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Plaintiff, by and through its attorneys, complain and allege as follows:
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INTRODUCTION
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1.
This is a class action brought on behalf of a nationwide Class of bars and
restaurants that purchase DirecTV and the NFL SundayTicketdescribed hereafter as

commercial subscribersthat challenges an agreement by defendants DirecTV, LLC
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and DirecTV Holdings LLC (collectively, DirecTV") and the National Football
COMPLAINT
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League, Inc. and NFL Enterprises LLC (collectively, the NFL) to protect and
increase the monopoly profits earned by DirecTV and the NFL, on behalf of the 32
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members of the league, from the live broadcast of Sunday afternoon out of market1
NFL games. All allegations herein are based on information and belief except for
those relating to Plaintiff and their own actions.
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2.
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Through an exclusive agreement with the NFL, DirecTV is the sole
distributor of the live game feeds for these games through DirecTVs NFL Sunday
Ticket service. This exclusive deal allows DirecTV to charge supracompetitive prices
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for NFL Sunday Ticket. As DirecTV says on its own website: Only DIRECTV
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brings you every play of every out-of-market game, every Sunday. Get the action
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on your TV with NFL SUNDAY TICKET. (Emphases added).
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3.
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The NFL Sunday Ticket is an out-of-market sports package that carries all
NFL games produced by Fox and CBS. Therefore, a viewer can choose to watch any of
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Out of market games means NFL games played on Sunday afternoon and not
otherwise broadcast on CBS, Fox, or formerly on NBC within the viewers television
market. The definition also excludes games within the home territory of one of the
NFL teams that is not aired on CBS, Fox, or formerly on NBC, due to the teams
failure to sell all of the tickets to the game prior to the blackout deadline for that game.
This distinct product, called the NFL Sunday Ticket or Sunday Ticket, has been
trademarked by Defendants and is recognized by them as a separate product from NFL
games broadcast on Fox, CBS, NBC, ESPN, and NFL Network.
COMPLAINT
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the out of market Sunday afternoon NFL games, instead of being restricted to the
games being telecast by the local Fox Broadcasting or CBS affiliates. Sunday Ticket
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appeals to bars and restaurants catering to NFL fans with loyalties to teams located
throughout the United States. These businesses generate a substantial share of their
overall revenue by having the capability to televise multiple professional football
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games simultaneously in order to attract a diverse range of fans to their establishments
on Sunday afternoons during the fall football season. Indeed, DirecTV specifically
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markets the NFL Sunday Ticket to restaurants and bars, including, for example,
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advertising such as: Turn your business into the neighborhoods go-to spot with the
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undisputed leader in sports and [o]nly DIRECTV has the sports packages you need
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to attract fans of every stripe with NFL SUNDAY TICKET 2015 . . . .
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4.
DirecTVs arrangement with the NFL allows the Defendants to restrict the
output of, and raise the prices for, the live broadcast of NFL Sunday afternoon out of
market games. Every NFL member team owns the initial rights to the broadcast of that
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teams games. However, the teams have chosen to collude with each other, and to
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grant the NFL the exclusive right to market those games outside each teams home
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market. But for the NFL teams agreement in which DirecTV has joined, teams would
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compete against each other in the market for NFL football programming, which would
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likely induce more competitive pricing.
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5.
DirecTVs ability to offer Sunday Ticket on an exclusive basis is material
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to its operations. Indeed, DirecTVs pending merger with AT&T depends, in

COMPLAINT
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substantial part, on continued exclusivity of this service. As, DirecTV noted in a filing
with the Securities and Exchange Commission on December 3, 2014, Pursuant to the
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Merger Agreement, AT&T had the right to terminate the Merger Agreement or not
consummate the Merger if we failed to enter into a contract with the NFL providing for
exclusive distribution rights for the NFL Sunday Ticket service. The fact that NFL
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Sunday Ticket is only available through DirecTV locks commercial subscribers into
the DirecTV service throughout the year. Other multi-channel video programming
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distribution (MVPD) competitors, such as Dish Network and Comcast are at a
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competitive disadvantage, and as a result, DirecTV can extract monopoly rents for its
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service. See, e.g., Comments of Cox, FCC MB Docket Nos. 12-68, 07-18, 05-192, at 3
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(June 22, 2012) (the exclusivity deal causing the most significant market distortion
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today is DirecTVs Sunday Ticket package); Testimony of Roger Noll before the
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Committee on the Judiciary, United States Senate (Nov. 14, 2006) (From my
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perspective, if one adopts the right counterfactual, the right but-for world in the
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competitive environment, it is obvious that NFL Sunday Ticket is a palliative
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compared to the output and prices that would exist in a competitive environment.).
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6.
As the Court in Cablevision Sys. Corp. v. FCC, 649 F.3d 695, 702 (D.C.
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Cir. 2011) recently noted, for MVPDs, sports programming is must have and non-
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replicable.
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7.
In Canada, the NFL Sunday Ticket is distributed on a non-exclusive basis
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through the following MVPDs: Shaw Cable; Shaw Direct; TELUS; Optik TV; TELUS
COMPLAINT
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Satellite TV; Bell TV; Access Communications; Cogeco Cable; EastLink Cable;
Rogers Cable; Vidotron; Westman Communications; MTS; and SaskTel.
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In the United States, Dish Network, a competing satellite MVPD,
concedes that DirecTVs flagship exclusive promotion is that they are the only TV
provider to offer the NFL Sunday Ticket . . . . If you want the NFL Sunday Ticket,
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then DirecTV wins this battle every time. However, Dish Network promotes itself as
having more channels with a lower monthly bill and that Dish wins versus DirecTV
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in the price category. Dish Network and other MVPDs would compete with DirecTV
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on price and service if they had access to distribution of the Sunday Ticket.
9.
A bar or restaurant with a fire code occupancy between 51-100 will pay
$2,314.00 for Sunday Ticket in 2015 (in addition to television package subscription
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charges, high-definition access fees, and other charges). And the price for Sunday
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Ticket is higher the larger the establishments EVO is. The largest establishments
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like Nevada hotelsare charged more than $120,000 per year for Sunday Ticket.
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10.
The NFL is the most popular professional sports league in the United
States. Because DirecTV and the NFL know that Plaintiff and the Class must exhibit
these games to effectively run their businesses, DirecTV and the NFL have agreed to
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set prices for NFL Sunday Ticket that are far higher than a competitive market would
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allow; it has been estimated that prices are as much as 43% higher because of
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DirecTVs exclusive deal with the NFL, yielding excess profits for DirecTV and the
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NFL in the tens of millions of dollars. But for DirecTVs agreement to protect the
COMPLAINT
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NFL through its exclusive Sunday Ticket contract, prices for the live broadcast of out
of market Sunday afternoon NFL games would be much lower, as would the cost of
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DirecTV programming packages required to be purchased in conjunction with Sunday
Ticket.
11.
Of the 4 major professional sports in this countrybaseball, basketball,
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hockey, and footballthe only one with an exclusive out of market broadcasting
arrangement is the NFL/DirecTV Sunday Ticket. Major League Baseball (MLB),
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the National Basketball Association (NBA), and the National Hockey League
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(NHL) all distribute live out of market games through multiple MVPDs, including,
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for example, DirecTV, Dish Network, Comcast, Cox Cable and Time Warner.
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As a result, DirecTV does not charge nearly as much for access to MLB
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Extra Innings, NBA League Pass, and NHL Center Ice, which provide access to more
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games per week over a longer season than the NFL. As the following pricing chart
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from DirecTV reflects:
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NFL Sunday Ticket
MLB Extra Innings
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EVO
1-50
51-100
101-150
151-200
201-350
COMPLAINT
1-PAY 3-PAY
1,458.00 486.00
2,314.00 771.33
5-PAY
291.60
462.80
1-PAY
595.00
805.00
1,120.00
4,630.00 1,543.33 926.00
1,600.00
6,479.00 2,159.67 1,295.80 2,080.00
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3-PAY
198.33
268.33
373.33
533.33
693.33
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351-500
501-750
751-1000
1001-1500
1501-2000
2001-5000
5001-10000
10000+
9,258.00
10,419.00
13,888.00
20,832.00
27,774.00
57,864.00
N/A
N/A
3,086.00
3,473.00
4,629.33
6,944.00
9,258.00
19,288.00
34,138.33
40,965.00
1,851.60
2,083.80
2,777.60
4,166.40
5,554.80
11,572.80
20,483.00
24,579.00
2,400.00 800.00
2,800.00 933.33
3,600.00 1,200.00
4,800.00 1,600.00
6,000.00 2,000.00
8,800.00 2,933.33
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13.
DirecTV and the NFL recently discussed their joint objective of
maximizing the supracompetitive prices charged to Plaintiff and similar businesses.
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The Plaintiff and the Class were targeted because they must purchase Sunday Ticket to
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attract customers to their bars and restaurants.
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14.
Plaintiff seeks to enjoin under the federal antitrust laws the ongoing,
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unreasonable restraint of trade that Defendants have implemented through DirecTVs
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exclusive deal to broadcast all Sunday afternoon out of market games. They also seek
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to recover damages for the Class for supracompetitive premiums that DirecTV has
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charged for NFL Sunday Ticket as a result of this unreasonable restraint of trade.
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This exclusive agreement eliminates competition by preventing other
MVPDs from distributing Sunday afternoon out-of-market NFL games. But for the
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exclusive agreement between DirecTV and the NFL, additional MVPDs would be
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willing to compete for consumers of these gamesand indeed, three MVPDs,
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Comcast, Time Warner and Cox, attempted in 2002 to obtain rights to broadcast
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Sunday Ticket on a non-exclusive basiswhich would reduce subscriber costs and

COMPLAINT
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enhance competition for viewershipbut were told by the NFL that the bid would not
be accepted. In addition, but for the horizontal agreement among NFL teams to sell a
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single package of out-of-market games, those individual NFL teams would compete
against each other and drive down the broadcast prices of out-of-market games.
JURISDICTION AND VENUE
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Plaintiff brings this action pursuant to Section 16 of the Clayton Act (15
U.S.C. 26), for a violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. 1-2.
This Court has subject matter jurisdiction over those claims pursuant to 28 U.S.C.
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1331 and 1337.
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Venue is proper pursuant to 28 U.S.C. 1391 and 15 U.S.C. 22. The
Defendants transact business in this District, and are subject to personal jurisdiction
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here.
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Class members were injured in this District and DirecTV is headquartered
in this District.
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PARTIES
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Plaintiff
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Plaintiff Ninth Inning Inc. dba The Mucky Duck is a pub located in San
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Francisco, California. Plaintiff has purchased the Sunday Ticket from DirecTV in
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order to attract patrons to its establishment on Sunday afternoons during the NFLs
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professional football season.
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COMPLAINT
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Defendants
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Defendant DirecTV Holdings LLC is a Delaware Limited Liability
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Company and has its principal place of business at 2230 East Imperial Highway, El
Segundo, California. It the U.S. operating arm of DirecTV, Inc. and describes itself as
a leading provider of digital television entertainment in the United States. It claims
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that [a]s of December 31, 2014, [it] had approximately 20.4 million subscribers.
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DirecTV, LLC is a California Limited Liability Company that has its
principal place of business at 2230 East Imperial Highway, El Segundo, California.
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DirecTV, LLC issues bills to its commercial subscribers.

22.
Until 2015, the NFL was an unincorporated association of 32 American
professional football teams in the United States. Each of the 32 NFL member teams,
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headquartered in various cities across the country, is separately owned and operated,
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acting in its own economic self-interest and competing in most respects with one
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another. Those teams are as follows:
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NFL Defendant Team Owner

Arizona Cardinals, Inc.
State of
Organization
Arizona
Team Name (City)

Arizona Cardinals
Atlanta Falcons Football Club LLC
Georgia
Atlanta Falcons
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Baltimore Ravens Limited Partnership Maryland
Baltimore Ravens
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Buffalo Bills, Inc.
New York
Buffalo Bills
Panthers Football LLC
North Carolina
Carolina Panthers
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COMPLAINT
Chicago Bears Football Club, Inc.
Delaware
Chicago Bears
Cincinnati Bengals, Inc.
Ohio
Cincinnati Bengals
Cleveland Browns LLC
Delaware
Cleveland Browns
Dallas Cowboys Football Club, Ltd.
Texas
Dallas Cowboys
Denver Broncos Football Club
Colorado
Denver Broncos
Detroit Lions, Inc.
Michigan
Detroit Lions
Green Bay Packers, Inc.
Wisconsin
Green Bay Packers
Houston NFL Holdings LP
Delaware
Houston Texans
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Indianapolis Colts, Inc.
Delaware
Indianapolis Colts
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Jacksonville Jaguars Ltd.
Florida
Jacksonville Jaguars
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Kansas City Chiefs Football Club, Inc. Texas
Kansas City Chiefs
Miami Dolphins, Ltd.
Miami Dolphins
Florida
Minnesota Vikings Football Club LLC Minnesota
Minnesota Vikings
New England Patriots, LP
Delaware
New England Patriots
New Orleans Louisiana Saints LLC
Texas
New Orleans Saints
New York Football Giants, Inc.
New York
New York Giants
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New York Jets Football Club, Inc.
Delaware
New York Jets
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Oakland Raiders LP
California
Oakland Raiders
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Philadelphia Eagles Football Club, Inc. Delaware
Philadelphia Eagles
Pittsburgh Steelers Sports, Inc.
Pittsburgh Steelers
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COMPLAINT
Pennsylvania
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San Diego Chargers Football Co.
California
San Diego Chargers
San Francisco Forty Niners Ltd.
California
San Francisco 49ers
Football Northwest LLC
Washington
Seattle Seahawks
The Rams Football Company LLC
Delaware
St. Louis Rams
Buccaneers Limited Partnership
Delaware
Tampa Bay
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Buccaneers
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Tennessee Football, Inc.
Delaware
Tennessee Titans
Washington Football Inc.
Maryland
Washington Redskins
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23.
In or about 2015, the NFL incorporated as the National Football League,
Inc., and has its headquarters at 345 Park Avenue, 7th Floor, New York, NY 10154. On
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information and belief, NFL Enterprises LLC was organized to hold the broadcast rights
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of the 32 NFL teams and license them to MVPDs and other broadcasters, including
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DirecTV. NFL Enterprises LLC is also located at 345 Park Avenue, 7th Floor, New
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York, NY 10154
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24.
Through the NFL, the 32 teams do cooperate in some respects, including
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by setting game rules and a game schedule, and dividing their member teams into
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geographic territories and assigning each team a home television territory for
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broadcasting purposes. The teams have also agreed to allow the NFL to negotiate on
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their behalf television contracts with national broadcasters, including for the broadcast
COMPLAINT
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of each teams games outside its home territory. These include the Sunday Ticket
package sold only through DirecTV.
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25.
In American Needle, Inc. v. National Football League, 560 U.S. 183
(2010), the United States Supreme Court unanimously rejected the NFL's claim that an
agreement regarding the joint marketing of club-owned intellectual property was the
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decision of a single entity the league not subject to section 1 of the Sherman Act
(15 U.S.C. 1). The Court reaffirmed lower court decisions that sports leagues are
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subject to the antitrust laws and that league owners must refrain from agreements that
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unreasonably restrain trade. The Court also reaffirmed its own decision in National
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Collegiate Athletic Assn v. Board of Regents, 468 U.S. 85 (1984), which held that the
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hallmark of an unreasonable restraint is one that raises price, lowers output, or renders
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output unresponsive to consumer preference.
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TRADE AND COMMERCE

26.
The NFL is by far the most significant provider of professional football in
the United States. This years Super Bowl was the most-watched program ever, with
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114.4 million viewers.

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By one estimate, the NFL brings in about $6 billion annually in total
television revenue from all sources. In 2011, the NFL negotiated nine-year extensions
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of its existing broadcast deals with Fox Broadcasting, CBS and NBC that will run
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through the 2022 season; According to an August 27, 2014 Bloomberg report, ESPN,
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Fox Broadcasting, CBS and NBC pay a respectively $1.9 billion, $1.1 billion, $1
COMPLAINT
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billion and $950 million per year for the right to broadcast NFL games. The Wall
Street Journal reported in September of 2014 that CBS paid $300 million for the right
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to telecast NFL Thursday Night Football for one year.

28.
The commerce between the NFL and DirecTV is equally imposing. In
October of 2014, it was announced that DirecTV and the NFL entered into a new
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telecasting deal reportedly worth $1.5 billion annually for the next eight years, a deal
that will bring $8 billion more to the NFL (over four additional years) than its last deal
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with DirecTV. Through these and other contractual deals, the NFL, its member teams
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and DirectTV engage in interstate commerce and in activities substantially affecting
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interstate commerce, and the conduct alleged herein substantially affects interstate
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commerce.
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CLASS ACTION ALLEGATIONS
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29.
Plaintiff brings this action on behalf of itself and as a class action under
Fed. R. Civ. P. 23 on behalf of all persons (excluding Defendants; their present and
former parents, subsidiaries, affiliates, and co-conspirators; and government entities)
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who fall within the following Class (the Class):

All DirecTV commercial subscribers that purchased the NFL Sunday
Ticket from DirecTV, or its subsidiaries, at any time beginning four years
prior to the filing of this complaint and until the effects of the
anticompetitive conduct described herein end.
30.
DirectTV has sold its Sunday Ticket service to Class members across the
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nation during the relevant period. Defendants have charged supracompetitive prices for
COMPLAINT
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that service.
31.
Due to the nature of the trade and commerce involved, the Class consists
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of many thousands of members. The exact number and their identities are known to
DirecTV.
32.
The Class is so numerous that joinder of all members is impracticable.
33.
There are questions of law and fact common to the Class, including:
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a.
Whether Defendants have engaged in and are continuing to engage
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in a contract, combination, or conspiracy among themselves to fix, raise,
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maintain or stabilize prices of video presentations of live Sunday NFL games by
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eliminating competition among presenters of out-of-market NFL games;
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b.
Whether Defendants have engaged in and are continuing to engage
in a contract, combination, or conspiracy among themselves to fix, raise,
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maintain or stabilize prices of the Sunday Ticket by preventing any competitor
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from offering competing products;
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c.
The identities of the participants in the conspiracy;
d.
The duration of the conspiracy and the acts performed by
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Defendants in furtherance of it;

e.
Whether the alleged conspiracy violated Section 1 of the Sherman
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Act, 15 U.S.C. 1;
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COMPLAINT
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f.
Whether the alleged conspiracy violated Section 2 of the Sherman
Act, 15 U.S.C. 2;
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g.
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Whether the conduct of Defendants caused injury to the Plaintiff
and the other members of the Class; and
h.
The appropriate Class-wide measure of damages.
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34.
Plaintiff and the Class were, during the Class period, commercial
subscribers to DirecTV who also purchased the Sunday Ticket package. Their claims
are typical of the claims of the Class, and the named Plaintiff will fairly and adequately
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protect the interests of that Class.

35.
Plaintiff is represented by counsel who are competent and experienced in
the prosecution of antitrust and class action litigation.
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36.
Given the high cost of establishing that Defendants agreements violated
the antitrust laws (including, but not limited to, substantial expert witness costs and
attorneys fees), a class action is the only economically feasible means for any Plaintiff
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to enforce their statutory rights.

37.
The prosecution of separate actions by individual members of the Class
would also create a risk of inconsistent or varying adjudications, establishing
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incompatible standards of conduct for Defendants.

38.
The questions of law and fact common to the members of the Class
predominate over any questions affecting only individual members, including legal and
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factual issues relating to liability and damages.

COMPLAINT
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39.
A class action is superior to other available methods for the fair and
efficient adjudication of this controversy. The Class is readily ascertainable and is one
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for which records exist. Prosecution as a class action will eliminate the possibility of
repetitious litigation. Treatment as a class action will permit a large number of
similarly situated persons to adjudicate their common claims in a single forum
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simultaneously, efficiently, and without the duplication of effort and expense that
numerous individual actions would engender. This class action presents no difficulties
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in management that would preclude maintenance as a class action.
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FACTUAL ALLEGATIONS
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A. Relevant Market
40.
The relevant geographic market is the United States. The relevant product
market is NFL Sunday afternoon out-of-market games. As described above, the
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national broadcast rights to select packages of games are negotiated by the NFL with
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networks CBS, NBC, ESPN and Fox Broadcasting. In addition to broadcasts of these
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games, the market includes broadcast rights for out-of-market games, such as those
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carried in the NFL Sunday Ticket package. Broadcasts of other sports or other content
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do not compete with broadcasts of NFL games. Moreover, NFL games broadcast
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locally on CBS and Fox Broadcasting on Sunday afternoons are not interchangeable
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with the multi-game offering provided by Sunday Ticket specifically because the local
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games are different from the multi-game offering provided by Sunday Ticket, which
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caters to fans that are not located within the geographical confines of their favorite
COMPLAINT
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teams home territories.

41.
DirecTV distinguishes between residential and commercial subscribers. A
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portion of its website is labeled DirecTV For Business and a further separate and
distinct tab for restaurants and bars is located on DirecTVs website, and thus it treats
these commercial subscribers as a distinct market.
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42.
Although there is undoubtedly some substitution that might occur between
in-market broadcasts (broadcasts of games that include the local NFL team) and outof-market broadcasts, the availability of the in-market games does not compete away a
11
12
monopolists ability to raise the price of out-of-market games above competitive
13
levels. This is particularly true in the case of commercial subscribers, where Plaintiff
14
and the Class need to attract customers with loyalty to a diverse range of NFL teams.
15
16
17
18
43.
New entries that would dilute the market power over NFL video
broadcasts created by the collusive agreements at issue here are extremely unlikely.
44.
New entries would require the creation of a new professional league
19
20
playing American football. Such an undertaking would be enormously expensive,
21
andbased on historyvery unlikely to succeed. Even if a new entrant did appear,
22
and even if it were sufficiently successful to sustain itself, it is unlikely that the
23
24
resulting video product would compete sufficiently with the NFLs broadcasts to
25
dissipate the NFLs monopoly power.
26
45.
In the 95 years since the NFLs formation in 1920, there have only been a
27
28
few noteworthy attempts at entry into the market for American football games. Three
COMPLAINT
17
1
2
times, once each in the decades of the 1920s, 1930s, and 1940s, an entity calling itself
the American Football League (AFL) was formed, briefly operated and then failed. In
3
4
1960 another entry attempt, also under the name AFL, operated independently for nine
years before merging with the NFL in 1970.
46.
The United States Football League (USFL) was founded in 1982 and
7
8
was disbanded in 1986. It sued the NFL for monopolization and won a jury verdict.
USFL v. NFL, 842 F.2d 1335 (2d Cir. 1988). There have also been failed attempts to
10
start and sustain a womens football league and various minor leagues or talent
11
12
development leagues. The closest thing to a successful entry is the Arena Football
13
League, which plays a substantially different type of footballindoor football. The
14
Arena Football League (AFL) began play in 1987 and continued through the 2008
15
16
season. The league was reorganized in 2010 and continues today. However, the games
17
of the AFL are played in spring and summer to avoid competition with NFL football
18
broadcasts. In addition, AFL produces an altogether different sport that does not
19
20
21
22
compete substantially with the NFL for broadcast audience.

47.
NFL teams are well established and popular, with 32 regionally diverse
teams in or near almost every major population center in the United States. There are
23
24
NFL teams within 18 of the 25 most populous metropolitan areas, dramatically limiting
25
the locations and audiences available to new teams or leagues. During the NFLs long
26
history not one of the few sporadic attempted entries has been successful at competing
27
28
for NFL football broadcast audiences. It is virtually impossible that a new league will
COMPLAINT
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2
form to compete away the NFLs monopoly power.

48.
That monopoly power will only be tempered if the underlying collusive
3
4
agreement that created the monopoly power is broken up through antitrust authority, or
if the exclusive deal that propagates that monopoly power is replaced by non-exclusive
licenses.
7
8
9
10
49.
The value of the monopoly power that DirecTV exercises as a result of its
exclusive deal with the NFL is once again illustrated by the recent acquisition offer for
DirecTV from AT&T. As Forbes noted in an October 1, 2014 article:
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12
13
14
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17
18
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20
DirecTV has renewed its agreement with the National Football League for
another 8 years. However, this time around, the price is increased by 50%
to around $1.5 billion a year. This is very expensive and far more than $1
billion that CBS, NBC and Fox pay for their respective NFL coverage.
The satellite company offers to its subscribers the popular NFL Sunday
Ticket, a sports package that broadcasts NFL regular season games that
are not available on local affiliates. Aided by the NFL, DirecTV has
managed to attract customers even at times when other pay-TV operators
were losing subscribers. The extended deal with the NFL will aid to the
overall subscriber growth for the company. Moreover, the agreement was
of key importance for DirecTV, as its proposed merger with AT&T to
some extent was dependent on this deal.
50.
Indeed, AT&Ts $48.5 billion offer to purchase DirecTV contains a clause
21
22
allowing AT&T to cancel the deal if DirecTV loses its exclusive, collusive contract for
23
Sunday Ticket. That clause provides: [t]he parties also have agreed that in the event
24
that DirecTVs agreement for the NFL Sunday Ticket service is not renewed
25
26
substantially on the terms discussed between the parties, the Company [AT&T] may
27
elect not to consummate the Merger.
28
COMPLAINT
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2
3
B. The NFL and the Broadcast Rights Agreements

51.
As noted above, the NFLs 32 member teams have given the league
authority to negotiate pooled rights television deals on their behalf, in exchange for an
4
5
equal share of the resulting revenues. The broadcast agreements with ESPN, Fox
Broadcasting, CBS and NBC were the result. NBC has the right to nationally broadcast
prime-time Sunday night games (NBC Sunday Night Football). ESPN has the right to
8
9
10
11
nationally broadcast prime-time Monday night games (Monday Night Football). In

addition, the NFL Networka cable and satellite network owned by the NFL
nationally broadcasts approximately eight regular season games, in partnership with
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13
14
15
CBS. (These games are usually broadcast during prime-time on Thursday nights.)
52.
Pursuant to their respective agreements with the NFL, CBS and Fox
Broadcasting, these entities televise between ten and fifteen weekly Sunday afternoon
16
17
games, which commence at either 1 p.m. or 4 p.m. Eastern time. For the first sixteen
18
weeks of the 17-week NFL season, on an alternating basis, one network is designated
19
to broadcast doubleheader games in both time slots and the other is designated to air
20
21
a single game in one of the slots. Both networks are permitted to show doubleheaders
22
the last week of the season. Subject to certain restrictions for games that do not sell
23
out, CBSs or Foxs local affiliate (as the case may be) generally must broadcast any
24
25
Sunday afternoon game being played by a team whose territory falls within the local
26
affiliates coverage area (i.e., an in market game).
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53.
As a result of this arrangement, during most weeks of the season, only
COMPLAINT
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three of the Sunday afternoon games are broadcast by CBS or Fox, and the specific
games available to any given viewer depend on whether the viewer is located within a
3
4
5
6
7
teams home territory and whether that team is playing on Sunday afternoon.
C. DirecTV and NFL Sunday Ticket
54.
Beginning in 1994, pursuant to an exclusive agreement with the NFL,
DirecTV began to offer its subscribers access to the Sunday afternoon games that are
not otherwise available in their market via national broadcasts. These subscribers could
10
11
12
13
14
15
purchase NFL Sunday Ticket, a premium subscription-based package that provides

access to all Sunday afternoon games broadcast on Fox and CBS, or their predecessors.
55.
Through its exclusive agreement with the NFL, DirecTV today takes the
live game telecast feeds produced by CBS and Fox and redistributes them without
16
alteration to NFL Sunday Ticket subscribers via DirecTV channels. NFL Sunday
17
Ticket subscribers can thus access all Fox or CBS games, except for the in market
18
19
20
21
22
23
games broadcast by the local Fox or CBS affiliate, which are available on the Fox or
CBS DirecTV channel.
56.
Defendants have colluded to sell the out-of-market NFL Sunday afternoon
games only through DirecTV. Such an arrangement eliminates competition in the
24
distribution of out-of-market Sunday afternoon games and requires anyone wishing to
25
view these games to subscribe to DirecTV and purchase NFL Sunday Ticket at the
26
27
28
supracompetitive price dictated by DirecTV.

57. DirecTVs exclusive arrangement with the NFL results in NFL Sunday
COMPLAINT
21
1
2
Ticket subscribers, including the commercial subscriber Plaintiff, paying a higher price
for NFL Sunday Ticket (and other access charges) than they otherwise would pay if the
3
4
5
6
agreements were negotiated competitively.

58.
For example, in 2002, when the NFL's first contract with DirecTV for
NFL Sunday Ticket expired, several cable companies acting as a consortium offered
7
8
$400 million to $500 million annually for the nonexclusive rights to carry Sunday
Ticket. The NFL rejected their bid and instead chose to renew with DirecTV, giving it
10
a five-year exclusive rights deal to Sunday Ticket for about $400 million per year.
11
12
13
14
59.
As noted above, in October of 2014, DirecTV renewed its exclusive
agreement with the NFL. On information and belief, the renewal requires DirecTV to
pay the NFL an average of $1,500,000,000 ($1.5 billion) per year for eight years in
15
16
return for the exclusive right to rebroadcast NFL Sunday afternoon games on
17
Defendants NFL Sunday Ticket service.
18
D. Commercial Subscriptions to NFL Sunday Ticket
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21
22
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25
26
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60.
DirecTV offers restaurants and bars amazing exclusive sports content
like NFL SUNDAY TICKET.

61.
The National Restaurant Association reports that NFL fans stay longer,
often 4 hours, and order 3 or more drinks.

62.
Although residential DirecTV subscribers pay a fixed charge for DirecTV
service and NFL Sunday Ticket, DirecTV charges commercial subscribers fees based
on the maximum occupancy permitted by the local fire code.
COMPLAINT
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63.
In recent years, the price DirecTV charges to commercial subscribers,
such as Plaintiff, for Sunday Ticket has increased substantially.
3
4
5
6
64.
DirecTV charges thousands of dollars to bars and restaurants each season
for the Sunday Ticket package. Its fees are based on fire code occupancy not on
actual viewership so bar and restaurant owners are paying for seats that often go
7
8
9
10
unfilled on a Sunday afternoon.

65.
The least expensive package is $1,458 per season, and the most expensive
runs in excess of $120,000. The least expensive Sunday Ticket package price
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12
increased roughly 11.5% this year and prices have increased substantially during the
13
Class period.
14
66.
The agreement between the NFL and DirecTV granting DirecTV the
15
16
exclusive right to distribute the Sunday afternoon out-of-market games is not necessary
17
to ensure telecast of such NFL football games. In fact, CBS and Fox are contractually
18
obligated to produce these games and provide over-the-air broadcast of them in local
19
20
21
22
and/or regional markets.

67.
As recently as 2014, representatives of DirecTV and the NFL met in
person and discussed the fact that commercial users like Plaintiff should be targeted for
23
24
double-digit price increases because Plaintiff and the Class would have little choice but
25
to pay higher prices due to their need to attract customers.
26
27
28
COMPLAINT
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68.
Sunday Ticket prices for the largest members of the Class have also
increased substantially since 2011. For example, prices for certain large commercial
3
4
subscribers increased in the following amounts:
2010
$41,895
2011
$43,990
2012
$43,990
2013
$61,680
2014
$86,446
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7
10
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12
13
14
69.
Professor Roger Noll charted the price increase for the NFL Sunday
Ticket for residential consumers relative to price changes in the out-of-market

broadcast packages offered by MLB, the NBA, and NHL. While residential customers
15
16
pay a fee for the Sunday Ticket service that is lower than commercial subscribers pay,
17
the chart is nonetheless illustrative of the pricing differential that exists between
18
Sunday Ticket (which is distributed exclusively through DirecTV) and Extra Innings,
19
20
League Pass, and Center Ice, which are distributed through competing MVPDs.
21
22
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25
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COMPLAINT
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Pricing for Regular Season Out-of-Market Television Bundle for Major

Professional Sports Leagues, 2005-2010
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6
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9
10
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15
Source: DTV-SP0046512.
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18
E. DirecTVs Wide-Ranging Role in the NFLs Scheme

70.
DirecTV has done the league important and valuable favors to maintain
19
20
the NFLs horizontal agreement, and DirecTVs exclusivity. As the 2011 NFL season
21
approached, with the NFLs labor deal with the players union expiring and a possible
22
lockout looming, DirecTV agreed to pay the NFL $1 billion even if no games were
23
24
played that season. No other outlet made such an offer; CBS, ESPN, Fox
25
Broadcasting, and NBC would have paid nothing if no games were played. DirecTVs
26
promise ensured that owners and league executives would make $1 billion even if the
27
28
entire season were cancelled.

COMPLAINT
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71.
As NFL Commissioner Roger Goodell said in announcing the deal, [w]e
are pleased to continue our partnership with DirecTV.DirecTV and Sunday Ticket
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4
have served our fans well for 20 years and continue to complement our broadcast
television packages. DirecTV Chairman, President and CEO Mike White stated that
[t]his new agreement is a testament to the terrific long-term relationship we have with
7
8
the NFL.NFL Sunday Ticket has always been the centerpiece of DirecTVs sports
leadership and were please to continue our relationship with the NFL and be a part of
10
the leagues future growth and success.
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13
14
72.
As noted above, DirecTV recently agreed to sell itself to AT&T in a
nearly $50 billion transaction that has attracted federal antitrust scrutiny. As a
condition of the deal, AT&T insisted that DirecTV renew its exclusive deal with the
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16
NFL, which DirecTV did in October 2014. If the AT&T-DirecTV deal closes, AT&T
17
will acquire something that CBS, Comcast, ESPN, Fox, NBC, and Verizon do not
18
havethe sole means to distribute out of market Sunday afternoon NFL games.
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21
22
23
F. Exclusivity Is Not Warranted

73.
The exclusive deal between DirecTV and the NFL for the broadcast rights
of NFL Sunday Ticket is necessary to preserve the exercise of market power created by
24
the teams anticompetitive agreement to monopolize the sales of broadcast rights.
25
Without the exclusive deal, some of the monopoly power created by the collusion
26
27
28
among NFL teams would be dissipated by price competition between DirecTV and one
or more distributors of broadcasts to customers.
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2
74.
There is no evidence to show that agreement was created to assure a
quality broadcast of the games offered on Sunday Ticket or to allow the NFL sufficient
3
4
oversight of games offered on Sunday Ticket or any other reasonable objective.
Instead, it seems as if the agreement was created to artificially raise the price of
Sunday Ticket.
7
8
9
10
75.
Indeed, the exclusive content enjoyed by DirecTV is rare. Rob Stecklow,
general manager of sports products and marketing for DirecTV, admitted as much:
[i]n this time and era where theres less and less content thats exclusive, the NFL still
11
12
reigns as some of the best content out there. The only way Plaintiff and other Class
13
members can view Sunday afternoon out-of-market NFL football games is by
14
purchasing NFL Sunday Ticket from DirecTV.
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17
18
76.
A case study involving Major League Baseballs (MLB) negotiation
with DirecTV for an exclusive contract to carry baseballs Extra Innings package from
2007 to 2013 can be used to estimate the price premium that DirecTV pays for NFL
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20
Sunday Ticket exclusivity, over the price of the right to carry Sunday Ticket that would
21
prevail under non-exclusive terms. Under the proposed exclusive baseball contract,
22
DirecTV agreed to pay MLB $700 million over seven years (200713) for exclusive
23
24
rights to carry the Extra Innings package. At that time, a provider called InDemand
25
had made a $70 million per year ($490 million over seven years) bid for non-exclusive
26
rights to carry Extra Innings, but this offer was declined by MLB. While MLB and
27
28
DirecTV were finalizing their exclusive contract, public outcry and Congressional
COMPLAINT
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pressure forced cancellation of the deal before the season began. With the prospect of
exclusivity eliminated, Extra Innings was carried by both DirecTV and InDemand,
3
4
thereby offering greater consumer choice in broadcasting than would have been
possible under an exclusive contract. In the MLB case study, DirecTVs $700 million
offer can be interpreted as the price of an exclusive Extra Innings contract, and
7
8
InDemands $490 million as the price of Extra Innings under a non-exclusive contract.
Therefore, the estimated overcharge arising from an exclusive contract with DirecTV
10
rather than the non-exclusive, multi-carrier contract proposed by InDemand is 43%.
11
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13
14
77.
Subscribers to DirecTV have been concerned about the market leverage it
has been able to obtain as a result of its deal with the NFL for Sunday Ticket. The
following interchange between a subscriber and business columnist Steven Pearlstein
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22
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25
26
was reported in a Washington Post article:

What do you make of the current exclusivity arrangement the NFL has
with DirecTV to broadcast games? I find that DirecTV will not sell its
'Sunday Ticket' package unless one also purchases a base programming
package. I don't feel receiving NFL games on cable is a God-given right,
but do feel the NFL is employing monopolistic practices by not opening
up the Sunday Ticket to other cable/satellite carriers. When might that
arrangement end? Thanks.
Steven Pearlstein: Right now they are using DirecTV as the instrument
for extending their football monopoly to the distribution of games on
video. They have made it clear, however, that they want to own the
distribution channel themselves and now share their monopoly profits
with DirecTV. That is their ultimate game plan, which by the way won't
include a free, over-the-air broadcast of local team games on local
television, unless they are forced to do so.
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28
COMPLAINT
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78.
Another columnist made a similar point in a May 2014 article on the
website of the Atlantic Monthly:
3
4
5
6
AT&Ts bid to acquire DirecTV includes acquisition of the Sunday Ticket

exclusive. The Los Angeles Times reports that snapping up Sunday Ticket
is a key goal of AT&T's. Professional football is among the most valuable
brands on the entertainment landscape. What communications corporation
wouldnt want a monopoly over a major NFL product?
7
8
9
10
But the Sunday Ticket cartel arrangement assures that only a small share
of the American population can enjoy viewer choice on Sunday
afternoons. The same voters who are taxed to subsidize the NFL, to the
tune around $1 billion annually, are denied a choice about what games to
watch.
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Adding insult to injury, anyone in Canada and Mexico can sign up for
NFL Sunday Ticket, without cable-carrier restrictions. In those nations,
telecommunication law forbids sole-carrier contracts. Inside the United
States, the NFLs antitrust waiver allows it to screw consumers with
impunity. And screwing consumers with impunity is a prerogative AT&T
wants too!
When the NFL made its first deal with DirecTV, satellite-relayed signals
were exotic and broadband cable did not exist: Initially, Sunday Ticket
was seen as a niche product for technophiles. A ratings calculation was at
work as well. Sunday Ticket is an annualized pay-per-view, and paychannel viewership does not count in Nielsen ratings. If large numbers of
viewers switched from NFL games aired on local affiliates to football
shown on Sunday Ticket, the NFLs Nielsen numbers would decline, even
if actual viewership was rising.
But as football has surged in popularity in the last two decades and
broadband has become available to nearly all the country, observers have
repeatedly expected that Sunday Ticket would become available to
everyone. After all, no one now could think the NFL is losing popularity,
while Nielsens scoring of new-viewership habits such as next-day DVR
of drama and comedy shows is taken into account in their advertising
rates. Today the NBA and MLB both market their extra-price watch-anygame services via cable.
COMPLAINT
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3
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But DirecTV has repeatedly offered the NFL a kings ransom to renew its
monopoly. For the 2014 season, DirecTV will pay the league $1 billion
for about two million Sunday Ticket subscribers: more than to be paid by
NBC, whose NFL games average 10 times as many viewers. DirecTV
offers the kings ransom because Sunday Ticket is the loss leader that put
the company on the map. And the NFL loves a customer that pays too
much!
DirecTV has done the league important favors to sustain its sweetheart
relationship. As the 2011 season approached, with the NFLs labor deal
expiring and a lockout possible, DirecTV agreed to pay $1 billion even if
no games were played that season. CBS, ESPN, Fox, and NBC would
have owed nothing for no games. The $1 billion promise from DirecTV
afforded the NFL a plush strike fund, ensuring owners and league
executives could live in luxury that year even if the season were
cancelled.
AT&T badly wants the same sweetheart relationship with the NFL, and
has insisted DirecTV renew its monopoly deal before the takeover closes.
If so AT&T will acquire something CBS, Comcast, ESPN, Fox, NBC, and
Verizon dont havethe sole means to watch the NFL game of your
choice.
The Justice Department should insist, as part of any approval it may offer
for the AT&T merger bid, that DirecTV divest itself of the Sunday Ticket
exclusive. Such a requirement may cause AT&T to back out of the deal,
or demand that DirecTV accept a lower price: but thats why there is
antitrust law, to provide a cross-check against behavior that harms
consumers. The NFLs viewer-choice service should be offered by all
cable carriers, as nearly all other entertainment products are available
across the cable universe.
Not only is it absurd that Americans subsidize a sports league so Canadian
and Mexican viewers can have more choice than Americans do. If Sunday
Ticket were available on all cable carriers, more buyers would allow for a
lower price, as happened with cell phones. Rather than a tiny number who
have good luck with geography paying $200 a year to pick their own NFL
game, many millions could pay, say, $50 a year for the same freedom.
Allowing AT&T to acquire DirecTVs Sunday Ticket monopoly would be
strongly anti-consumer. Using this moment to divest the monopoly and
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2
bring Sunday Ticket to all telecommunications platforms would be

strongly pro-consumer. Please dont tell us the Justice Department and the
White House will mess this opportunity up.
3
4
79.
For years DirecTV has hypocritically fought with its cable industry
competitors to ensure that vital access to sports programming on so-called
regional sports networks or RSNs is available to it on a non-exclusive basis.
For example, on August 31, 2012, DirecTV wrote to the Federal
Communications Commission in support of a proposed rule extending a ban on
vertically integrated cable companies from withholding access to RSNs from
10
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other MVPDs, including DirecTV:

Six years ago, the Commission used a regression analysis to evaluate and
quantify the potential harm to competition that results when a cableaffiliated programmer withholds content from rival MVPDs. Among other
things, the Commission found that, as a result of the decision by the Coxaffiliated regional sports network ("RSN") in San Diego to deny its
programming (including games of the San Diego Padres) to MVPD rivals,
DBS penetration in the San Diego market was 40.5% lower than it would
have been if that programming had not been withheld. The attached
economic analysis of San Diego subscribership is qualitatively consistent
with the Commission's finding about the damage done when cable-affiliated
programmers withhold content from competitors.
This updated analysis takes advantage of the fact that the Cox RSN recently
lost the rights to telecast Padres games. This season, those games are
available to all MVPDs through Fox Sports San Diego (''FSSD").
DIRECTV carries FSSD, as does Cox. These recent developments in San
Diego offer a natural experiment through which to evaluate the effects of
gaining access to valuable content. Accordingly, DIRECTV asked
Professor Kevin Murphy to augment his prior economic analysis in this
proceeding with an analysis of subscribership in San Diego in light of this
new RSN arrangement.
As more fully detailed in Professor Murphy's attached report, the data from
2012 are consistent with the Commission's finding in 2006. In order to
evaluate the effect on DIRECTV's subscribership from gaining access to
COMPLAINT
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6
7
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10
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Padres games, Professor Murphy first calculated the difference in the

growth rate in the number of DIRECTV subscribers in San Diego before
and after these RSN changes. He then calculated this difference for a set of
control markets, and compared the before-and-after difference in
DIRECTV's growth rates in San Diego to the before-and-after difference in
DIRECTV's growth rates in the control markets. The results of this analysis
indicate that DIRECTV has gained substantially more subscribers in San
Diego since it gained access to Padres games through FSSD than would
have been expected based on its subscribership trends in comparable
markets. These gains were achieved in only the first five months of
DIRECTVs FSSD carriage; the long run effects likely will be larger, as
additional San Diego households revisit their MVPD choice. These
conclusions are further supported by customer surveys, which evidence an
increase in the number of new subscribers citing access to sports channels
as the reason for subscribing to DIRECTV since it began carriage of FSSD.
80. Thus, as DirecTVs own data demonstrates, consumers benefit from
the non-exclusive distribution of live sports content by way of enhanced
13
14
15
16
competition amongst MVPDs.

G. DirecTVs Most Recent Agreement with NFL for the 2014 Regular Season
81.
Prior to October of 2014, representatives of DirecTV were making public
17
18
19
20
statements that it would only pay so much for that exclusivity.

82.
DirecTV CFO Pat Doyle (Doyle) said at a 2013 investors conference
that, if the price goes up too high when the current NFL Sunday Ticket deal expires
21
22
after the 2014 season, DirecTV would consider striking a non-exclusive deal with the
23
NFL or possibly even dropping the popular package, according to the Hollywood
24
Reporter.
25
26
27
28
83.
In 2014, Doyle reiterated that he would rather share Sunday Ticket with
cable or even drop it all together to prevent paying double the asking price.
COMPLAINT
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2
84.
These statements were efforts at misdirection. As noted above, in October
of 2014, DirecTV renewed the deal on terms even more lucrative for the NFL and its
3
4
member teams.
85.
The out-of-market Sunday afternoon NFL games constitute a distinct
product market and are not interchangeable with the over-the-air telecasts of local NFL
7
8
games. This is particularly true for commercial subscribers. As a result, commercial
subscribers to Sunday Ticket are willing to pay a substantial amount to offer their
10
customers the opportunity to view multiple NFL out-of-market games.
11
12
13
14
86.
In contrast to the NFLs exclusive deal with DirecTV, the NBA, the NHL,
and MLB offer their live out-of-market game packages through both DirecTV and
cable sports networks, including, for example, various sports networks owned by
15
16
Comcast. In the but for world, these other providers would compete for viewers of
17
Sunday afternoon out-of-market NFL football games, which would result in lower
18
prices, as teams and providers competed for viewership.
19
20
21
22
87.
Defendants could achieve any legitimate, pro-competitive goals without
an exclusive arrangement. As noted in the Atlantic Monthly article cited above,

Sunday Ticket is offered in Canada on a non-exclusive basis through more than a
23
24
dozen satellite and cable providers. And in the United States, other pro football
25
products such as the NFLs Red Zone package (which offers views of selected in-
26
game highlights) are offered on a non-exclusive basis as well.
27
28
COMPLAINT
33
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88.
Defendants and their co-conspirators exclusive agreement has a clear
negative impact on competition, and serves no pro-competitive purpose. There is no
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4
evidence that this agreement was created to assure the quality of Sunday Ticket or to
allow the NFL sufficient oversight, or any other permissible objective. Instead,
DirecTV and the NFL entered into the agreement with the intent of maintaining a
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monopoly price for Sunday Ticket. And, because all the NFL teams have colluded to
offer the package, they have also prevented individual competition by teams selling
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their own games to broadcasters.
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89.
There are several less restrictive alternatives which would achieve any
legitimate, procompetitive goals. Those include letting teams contract individually with
DirecTV and allowing other distributors to purchase and exhibit the Sunday Ticket
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package.
90.
Plaintiff seek to restore competition by ending the collusive agreement by
Defendants that eliminate competition in the distribution of the live out-of-market NFL
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games over television, while monopolizing or attempting to monopolize the broadcast
21
market for out of market Sunday afternoon NFL games.
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H. Plaintiff And The Class Have Suffered Antitrust Injury

91.
Plaintiff and the Class were, and continue to be, harmed by Defendants
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anti-competitive agreement with NFL. Plaintiff and the Class are direct purchasers of
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NFL Sunday Ticket and the territorial restrictions enforced by the exclusive
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arrangement between DirecTV and the NFL causes Plaintiff and the Class to pay a
COMPLAINT
34
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higher, supracompetitive price for the package of out-of-market NFL games than they
otherwise would have paid if the agreement were negotiated competitively.
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92.
The agreements described above have restrained horizontal competition
between and among the distributors of NFL games, including competition in the
commercial exploitation of televised presentations of live games. In particular, without
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the exclusive licenses and other competitive restraints, DirecTV, the television
networks, and other MVPDs would compete with each other in the distribution of NFL
10
games to a much greater extent than the limited opportunities now available.
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93.
The agreements described above have adversely affected and substantially
lessened competition in the relevant markets. As a result, prices are higher than they
would be in the absence of the agreements to restrict competition.
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94.
The agreements described above do not concern matters of NFL structure
and do not concern any unique characteristic or need of football exhibitions. These
anticompetitive restraints are not necessary to the exhibition of football and are not
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integral to the sport itself.

95.
There are no legitimate, pro-competitive justifications for these exclusive
license agreements and other competitive restraints, which would justify the anti-
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competitive harms they create.

96.
A similar issue was dealt with in the case of Laumann v. National Hockey
League, Nos. 12cv1817 (SAS), 12cv3704 (SAS), 2014 WL 3900566 (S.D.N.Y.
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Aug. 8, 2014). There Judge Shira Schiendlin was dealing with agreements by MLB
COMPLAINT
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and the NHL with DirecTV that involved the telecasting of games outside of a member
teams home territory. Judge Schiendlin denied summary judgment, finding triable
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issues as to antitrust injury:

Plaintiff have carried their initial burden of showing an actual impact on
competition. The clubs in each League have entered an express agreement
to limit competition between the clubsand their broadcaster affiliates
based on geographic territories. There is also evidence of a negative
impact on the output, price, and perhaps even quality of sports
programming. Plaintiff' expert, Dr. Roger G. Noll [Noll], attests that
consumers pay higher prices for live game telecasts, and have less choice
among the telecasts available to them, than they would in the absence of
the territorial restrictions. Similarly, Dr. Noll estimates that the price of
OOM [out-of-market] packages would decrease by about fifty percent in a
world without the restrictions.
Id. at *8. She went on to rule that there were jury issues as to whether telecasters like
DirecTV were participants in the conspiracy between MLB, the NHL and their
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member clubs. Id. at *12-13.

97.
The expert evidence by Noll provided in that case and cited by Judge
Schiendlin was as follows:
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The ability to extract more revenues from an exclusive contract arises

because out-of market telecasts are a subscription driver for MVPDs
[multichannel video programming distributors like DirecTV]. The benefits
of exclusivity to the licensee then can be captured by MLB through higher
rights fees by auctioning the exclusive rights to the highest bidder. If live
telecasts of other sports, or other types of programming, were close
competitive substitutes for MLB Extra Innings, DirecTV would not be
able to obtain greater revenue from subscribers by obtaining exclusive
rights, and so MLB would not be able to extract additional revenue by
selling Extra Innings on an exclusive basis.
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COMPLAINT
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Declaration of Roger G. Noll, p. 89 (Feb. 14, 2014), filed in Laumann v. National

Hockey League, Nos. 12cv1817 (SAS), 12cv3704 (SAS) (S.D.N.Y.). During the
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course of this analysis, Noll presented a chart showing the drastic price increases in
NFL Sunday Ticket regular season packages, which climbed by 34% from 2005 to
2010. Id., Exh. 4.
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98.
Noll made a similar point in testimony before the United States Senate
Judiciary Committee at a November 14, 2006 hearing on Competition In Sports

Programming And Distribution: Are Consumers Winning?:
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The relevant benchmark for whether an action is pro- or anti-competitive

is the circumstance that would prevail in a competitive world. The
argument that NFL Sunday Ticket increased output is correct, but it
increased output in a monopolized market. The issue is what is the
alternative in the absence of monopolization, and in the absence of
monopolization, the market for televised NFL games would be like other
pro sports were or like college sports are today. For example, if all
broadcasting of college football games were put together into a single
package priced at $150 a month and shown exclusively through DirecTV,
the effort would be a profit-enhancing reduction in output. From my
perspective, if one adopts the right counterfactual, the right but-for world
in the competitive environment, it is obvious that NFL Sunday Ticket is a
palliative compared to the output and prices that would exist in a
competitive environment.
I. The Sports Broadcasting Act Does Not Shield Defendants Anticompetitive
Acts
99.
Congress enacted the Sports Broadcasting Act of 1961 (SBA) to
facilitate the sale of packaged broadcast rights for pro sports leagues. It states:
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The antitrust laws, as defined in section I of the Act of October 15, 1914
[Section One of the Sherman Act] ... shall not apply to any joint
agreement by or among persons engaging in or conducting the organized
professional team sports of football, baseball, basketball, or hockey, by
COMPLAINT
37
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which any league of clubs participating in professional football, baseball,

basketball, or hockey contests sells or otherwise transfers all or any part of
the rights of such league's member clubs in the sponsored telecasting of
the games of football, baseball, basketball, or hockey, as the case may be,
engaged in or conducted by such clubs.
15 U.S.C. 1291.
100. In essence, the SBA granted all the major sports leagues an exemption
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from antitrust liability when entering into pooled-rights contracts.

101. The SBA is expressly limited to sponsored telecasting, which courts
have construed to mean that the SBA only applies to broadcast television and not to
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cable or satellite. In fact, when the SBA was being passed through Congress, former
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NFL Commissioner Pete Rozelle (Rozelle) was asked by the House of
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Representatives, [y]ou understand . . . that this Bill covers only the free telecasting of
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professional sports contests, and does not cover pay T.V.? to which Rozelle
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responded under oath, [a]bsolutely. Another former NFL commissioner, Paul
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Tagliabue, has conceded before a Senate Committee that the term sponsored
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telecasts does not include pay and cable . . . . This is clear from the legislative history
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and from the committee reports.
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102. Thus, the SBA offers Defendants and their co-conspirators no protection
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for their anti-competitive acts.

103. In Shaw v. Dallas Cowboys Football Club, Ltd., No. Civ. A. 97-5184,
1998 WL 419765 (E.D. Pa. June 23, 1998), aff'd, 172 F.3d 299 (3d Cir. 1999), plaintiff
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Charles Shaw brought a consumer Class action suit against several NFL teams and the
COMPLAINT
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NFL itself, alleging that the NFLs agreement for Sunday Ticket with DirecTV
violated the Sherman Act.
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104. The NFL argued, in moving to dismiss, that Sunday Ticket was exempt
from antitrust scrutiny under the SBA because Sunday Ticket is simply a sale of the
[teams] residual rights in the games which were broadcast on sponsored telecasts,
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and, so, the package is a sale of part of the rights to the sponsored telecasts. 1998
WL 419765, at *2.
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105. The court in Shaw rejected the NFLs argument, finding that the NFL's
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sale of Sunday Ticket fell outside the SBAs protections, and holding instead that
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sponsored telecasts refers only to the more traditional corporate-sponsored
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commercial context, rather than the pre-paid, commercial-free package context. Id. at
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*3.
106. Likewise, in Laumann v. NHL, 907 F.Supp.2d 465 (S.D.N. Y. 2012),
Judge Scheindlin also held that the term [s]ponsored telecasting under the SBA
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pertains only to network broadcast television and does not apply to non-exempt
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channels of distribution such as cable television, pay-per-view, and satellite television
22
networks. Id. at 489 n. 141 (quoting Kingray v. NBA, Inc., 188 F.Supp.2d 1177,
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1183 (S.D. Cal. 2002)).
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COMPLAINT
39
CLAIMS FOR RELIEF
COUNT ONE
Violation of Section 1 of the Sherman Act
(Per Se Violation)
107. Beginning at a time presently unknown to Plaintiff, and continuing
through the present, the exact dates being unknown to Plaintiff, Defendants, including
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the 32 teams that comprise the NFL, entered into a continuing agreement, combination
or conspiracy in restraint of trade with the purpose, intent, and effect of restraining
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horizontal competition in the live game distribution market with the purpose, intent,
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and effect of restraining trade and commerce in the distribution of live NFL games, in
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violation of Section 1 of the Sherman Act (15 U.S.C. 1).
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108. This contract, combination or conspiracy has resulted in an agreement
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understanding, or concerted action between and among the Defendants that the Sunday
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Ticket will exclusively be provided by DirecTV. The agreement forbids any other
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MVPD from offering the same product.
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109. The contract, combination or conspiracy alleged above has substantial

horizontal elements, including agreements between the 32 NFL teams, to limit
competition between and among the member teams, who would otherwise be
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competitors in the live game distribution market, such that application of the per se rule
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is justified under the facts and circumstances set forth herein.
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110. This contract, combination, or conspiracy has also restrained competition
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between and among the DirecTV and potential competitors in violation of Section 1 of
COMPLAINT
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the Sherman Act. It has led to anticompetitive effects, including increased prices and
reduced output, and otherwise caused injury to consumers and competition in those
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relevant markets and elsewhere.

111. The Defendants contract, combination, agreement, understanding or
concerted action occurred in or affected interstate commerce. The Defendants
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unlawful conduct was through mutual understandings, combinations or agreements by,
between and among Defendants.
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112. Defendants' anticompetitive conduct has directly and proximately caused
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antitrust injury, in the form of higher prices and reduced choice, as set forth
13
above. Plaintiff and other commercial subscribers will continue to suffer antitrust
14
injury and other damage unless Defendants are enjoined from continuing to engage in
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the foregoing violations of law.
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COUNT TWO
18
Violation of Section 1 of the Sherman Act
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(Rule of Reason)
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113. Plaintiff, on behalf of itself and the Class, incorporate and re-allege the
preceding paragraphs of the complaint.
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114. Beginning at a time presently unknown to Plaintiff, and continuing

through the present, the exact dates being unknown to Plaintiff, Defendants entered
into a continuing agreement, combination or conspiracy in restraint of trade with the
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purpose, intent, and effect of restraining horizontal competition in the live game
COMPLAINT
41
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distribution market with the purpose, intent, and effect of restraining trade and
commerce in the distribution and broadcasting of live NFL games, in violation of
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Section 1 of the Sherman Act (15 U.S.C. 1).

115. This contract, combination or conspiracy has resulted in an agreement
understanding, or concerted action between and among the Defendants that the Sunday
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Ticket will exclusively be provided by DirecTV. The agreement forbids any other
competitor from offering the same product.
10
116. This contract, combination, or conspiracy has also restrained competition
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12
between and among the DirecTV and potential competitors in violation of Section 1 of
13
the Sherman Act. It has led to anticompetitive effects in the relevant markets, as
14
alleged herein, and caused injury to consumers and competition in those relevant
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markets and elsewhere.

117. The relevant geographic market is the United States. The relevant product
market is the market for live distribution of NFL games through the Sunday Ticket
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service to commercial subscribers. The Defendants explicitly recognize this product
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market and have, in fact, trademarked the Sunday Ticket name. The Defendants direct
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advertising and marketing dollars towards this market and to commercial subscribers,
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specifically.
118. The NFL, and its 32 teams, have monopoly power with respect to the
creation, licensing, and distribution of NFL games. DirecTV has market power in the
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MVPD market, generally, and specifically in the market for commercial

COMPLAINT
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subscribers. DirecTVs exclusive arrangement with the NFL for the distribution of
Sunday Ticket enhances DirecTVs market power in the MVPD market, generally, and
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provides it with a monopoly in the market for the live distribution of NFL games
through the Sunday Ticket service.
119. The Defendants contract, combination, agreement, understanding or
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8
concerted action occurred in or affected interstate commerce. The Defendants
unlawful conduct was through mutual understandings, combinations or agreements by,
10
between and among Defendants.
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120. Defendants' anticompetitive conduct has directly and proximately caused

antitrust injury, in the form of higher prices and reduced output, as set forth
above. Plaintiff and other commercial subscribers will continue to suffer antitrust
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16
injury and other damage unless Defendants are enjoined from continuing to engage in
17
the foregoing violations of law.
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COUNT THREE
VIOLATION OF SECTION 2 OF THE SHERMAN ACT
121. Plaintiff, on behalf of itself and the Class, incorporate and re-allege the
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preceding paragraphs of the complaint.

122. Defendants, by the above-mentioned conduct, possess monopoly power
over the creation, licensing, and distribution of live NFL football broadcasts and have
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used that power for the purposes of unreasonably excluding and/or limiting
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competition, in violation of Section 2 of the Sherman Act (15 U.S.C. 2), by limiting
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COMPLAINT
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the distribution of the Sunday Ticket service to only one MVPD, DirecTV. These
activities have gone beyond those which could be considered as legitimate business
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activities, and are an abuse of Defendants market position.
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123. The relevant geographic market is the United States. The relevant product
market is the market for live distribution of NFL games through the Sunday Ticket
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8
service to commercial subscribers. The Defendants explicitly recognize this product
market and have, in fact, trademarked the Sunday Ticket name. The Defendants direct
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advertising and marketing dollars towards this market and to commercial subscribers,
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12
specifically.
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124. Through the anti-competitive conduct described herein, DirecTV has

willfully acquired and maintained monopoly power, and unless restrained by the Court,
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will continue to willfully maintain, that monopoly power in the relevant market by
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anti-competitive and unreasonably exclusionary conduct. The NFL, by and on behalf
18
of its 32 member teams, have acted with an intent to allow DirecTV to illegally acquire
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and maintain that monopoly power in the relevant product market, and Defendants
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illegal conduct has enabled DirecTV to do so, in violation of Section 2 of the Sherman
22
Act.
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125. Defendants anticompetitive conduct has directly and proximately caused

antitrust injury, as set forth above. Plaintiff and other commercial subscribers will
continue to suffer antitrust injury and other damage unless Defendants and their co-
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conspirators are enjoined from continuing to engage in the foregoing violations of law.
COMPLAINT
44
PRAYER FOR RELIEF
WHEREFORE, Plaintiff pray as follows:
1.
That the Court determines that this action may be maintained as a Class
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action under Fed. R. Civ. P. 23, and that Plaintiff be named representatives of the
Class.
2.
That the contract, combination or conspiracy, and the acts done in
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furtherance thereof by Defendants and their co-conspirators as alleged in this

complaint, be adjudged to have been a violation of Section 1 of the Sherman Act.
3.
That Defendants and their co-conspirators actions to illegally acquire and
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maintain monopoly power in the relevant product market, be adjudged to have been in
14
violation of Section 2 of the Sherman Act.
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4.
That judgment be entered for Plaintiff and members of the Class against
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Defendants for three times the amount of damages sustained by Plaintiff and the
18
members of the Class as allowed by law, together with the costs of this action,
19
including reasonable attorneys fees, pursuant to Sections 4 and 16 of the Clayton Act
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(15 U.S.C. 15 and 26).

5.
That Plaintiff and the Class be awarded pre-judgment and post-judgment
interest at the highest legal rate from and after the date of service of this Complaint to
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the extent provided by law;

6.
That Defendants and their co-conspirators be enjoined from further
violations of the antitrust laws; and,

COMPLAINT
45
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7.
That Plaintiff and members of the Class have such other, further or
different relief, as the case may require and the Court may deem just and proper under
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the circumstances.
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DEMAND FOR JURY TRIAL

Plaintiff requests a jury trial on all matters so triable.
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Dated: July 13, 2015
Respectfully submitted,
HAUSFELD LLP
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By:
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Michael D. Hausfeld
HAUSFELD LLP
1700 K Street NW, Suite 650
Washington, DC 20006
Tel: (202) 540-7200
Fax: (202)540-7201
Email: mhausfeld@hausfeld.com
Irving Scher
Scott A. Martin
HAUSFELD LLP
165 Broadway, Suite 2301
New York, NY 10006
Tel: (646) 357-1100
Fax: (212) 202-4322
Email: ischer@hausfeld.com
Email: smartin@hausfeld.com
Lee Albert
Brian Murray
GLANCY PONGRAY & MURRAY LLP
122 East 42nd Street, Suite 2920
New York, NY 10168
Tel: (212) 682-5340
COMPLAINT
/s/ Christopher L. Lebsock

Michael P. Lehmann (SBN 77152)
Bonny E. Sweeney (SBN 176174)
Christopher L. Lebsock (SBN 184546)
HAUSFELD LLP
600 Montgomery St., Suite 3200
San Francisco, CA 94111
Tel: (415) 633-1908
Fax: (415) 358-4980
Email: mlehmann@hausfeld.com
Email: bsweeney@hausfeld.com
Email: clebsock@hausfeld.com
Lionel Z. Glancy
GLANCY PONGRAY & MURRAY
LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Tel: (310) 201-9150
Fax: (310) 432-1495
Email: lglancy@glancylaw.com
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Fax: (212) 884-0988

Email: lablert@glancylaw.com
Email: bmurray@glancylaw.com
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Attorneys for Plaintiff Ninth Inning Inc. dba The Mucky Duck
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COMPLAINT
47

Ninth Inning

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Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 1 of 48 Page ID #:1

Michael P. Lehmann (SBN 77152)

Attorneys for Plaintiff Ninth Inning Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

Ninth Inning Inc. dba The Mucky

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 2 of 48 Page ID #:2

COMPLAINT FOR DAMAGES AND

CLASS ACTION COMPLAINT FOR DAMAGES AND

Plaintiff, by and through its attorneys, complain and allege as follows:

This is a class action brought on behalf of a nationwide Class of bars and

restaurants that purchase DirecTV and the NFL SundayTicketdescribed hereafter as

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 3 of 48 Page ID #:3

those relating to Plaintiff and their own actions.

Through an exclusive agreement with the NFL, DirecTV is the sole

on your TV with NFL SUNDAY TICKET. (Emphases added).

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 4 of 48 Page ID #:4

overall revenue by having the capability to televise multiple professional football

games simultaneously in order to attract a diverse range of fans to their establishments

to attract fans of every stripe with NFL SUNDAY TICKET 2015 . . . .

likely induce more competitive pricing.

DirecTVs ability to offer Sunday Ticket on an exclusive basis is material

to its operations. Indeed, DirecTVs pending merger with AT&T depends, in

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 5 of 48 Page ID #:5

distribution (MVPD) competitors, such as Dish Network and Comcast are at a

competitive environment, it is obvious that NFL Sunday Ticket is a palliative

In Canada, the NFL Sunday Ticket is distributed on a non-exclusive basis

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 6 of 48 Page ID #:6

In the United States, Dish Network, a competing satellite MVPD,

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 7 of 48 Page ID #:7

DirecTV programming packages required to be purchased in conjunction with Sunday

Of the 4 major professional sports in this countrybaseball, basketball,

arrangement is the NFL/DirecTV Sunday Ticket. Major League Baseball (MLB),

from DirecTV reflects:

NFL Sunday Ticket

MLB Extra Innings

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 8 of 48 Page ID #:8

DirecTV and the NFL recently discussed their joint objective of

maximizing the supracompetitive prices charged to Plaintiff and similar businesses.

attract customers to their bars and restaurants.

unreasonable restraint of trade that Defendants have implemented through DirecTVs

This exclusive agreement eliminates competition by preventing other

willing to compete for consumers of these gamesand indeed, three MVPDs,

Sunday Ticket on a non-exclusive basiswhich would reduce subscriber costs and

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 9 of 48 Page ID #:9

JURISDICTION AND VENUE

1331 and 1337.

Venue is proper pursuant to 28 U.S.C. 1391 and 15 U.S.C. 22. The

Class members were injured in this District and DirecTV is headquartered

professional football season.

Case 2:15-cv-05261 Document 1 Filed 07/13/15 Page 10 of 48 Page ID #:10

Defendant DirecTV Holdings LLC is a Delaware Limited Liability

a leading provider of digital television entertainment in the United States. It claims

DirecTV, LLC is a California Limited Liability Company that has its

principal place of business at 2230 East Imperial Highway, El Segundo, California.

DirecTV, LLC issues bills to its commercial subscribers.

Until 2015, the NFL was an unincorporated association of 32 American

another. Those teams are as follows:

NFL Defendant Team Owner

Team Name (City)

Atlanta Falcons Football Club LLC

Baltimore Ravens Limited Partnership Maryland

Buffalo Bills, Inc.

Panthers Football LLC